If you have driven down Columbia, King, Ezra, or Bricker st. lately (to name only a few), I am sure you will have noticed the transformation that the Waterloo cityscape is undergoing. Large multi unit student buildings are popping up all over.
If you are like me, I am sure you have wondered to yourself can the student population support such a massive influx of student accomodation?
I decided to do a little research.
University enrollment across the province is on the rise. According to the Council of Ontario Universities enrollment has increased steadily from 2000-2001 academic year to at least the 2009-2010 academic year. Between 2008-2009 and 2009-2010 undergraduate full time enrollment in all Ontario Universities increased from 352,945 to 367,615 or 4.2%. Graduate full time enrollment increased from 48,370 to 51,041 or 5.5%..
Waterloo Universities are no exception to this trend, According to the Student Accommodation Study Monitoring Report prepared by MMM Group Ltd for the City of Waterloo it is anticipated that there will be an extra 1000 students coming to the city each year, with about 700-860 new students that will require off-campus housing each year.
Click here to view a table showing past and projected enrollment for both Waterloo Universities. (excerpt from the Student Accommodation Study)
So there is a demand. But is it really big enough to support the construction explosion we have witnessed over the last few years? What did the students do before?
The Student Accommodation Study also took a look at apartment construction and proposals in and around the universities from the period between 2008-2011. During this time apartment construction and proposals amounted to more than 19,825 new beds potentially* being brought to the market. Click the link to view the stats from the study-Student Buildings New Construction
The study also found that student lodging houses account for another 6209 beds. (click here Student Lodging Houses)
So if we take the total number of beds from lodging houses and new apartments we end up with 26,034 available beds. When we compare this to the estimated demand for off campus housing for 2012 of 25,729, we can see that there is more availability than demand.
It should be pointed out that many of the new construction beds are not yet finished so these numbers are somewhat skewed. The stats above also do not account for other forms of off campus student accommodation such as Class A & B rentals, or staying with family members.
So what does this all mean?
It appears to me that there is (or will be) more inventory than demand. Yes we are seeing an increase of approx 700-860 students per year but looking at the construction going on throughout the city- it appears to be outpacing the need. There is no doubt that the new rental bylaws introduced in the City of Waterloo will have a large impact on driving students out of single family homes and smaller rental units and into larger multi student dwellings like these but in the end when there is more inventory than demand this inevitably drives rental prices down.
The big loser will be the small investor. The new rental bylaws have created a paperwork nightmare and added substantial dollars to the average investors bottom line through application fees, inspections etc. I understand its purpose- many rentals were not safe and too many students were being crammed into small homes- placing pressure on the cities infrastructure and deteriorating once desirable neighbourhoods
I think lodging houses will begin to find it difficult to compete with their newer mutil unit counterparts that often have the added bonus of location and amenities to offer to potential renters.
Despite the smaller single detached rentals losing ground I feel there will always be a niche for single detached homes in the unversity rental market- after all who will hold the parties?
For more information on this topic and for estimates of typical bedroom rents see link below:
We are always interested in your feedback and comments.